The US Securities and Exchange Commission has censured New York-based broker-dealer OTC Link LLC and ordered it to pay a $575,000 civil penalty following persistent failure to enforce systems compliance and integrity standards.
Overview of Enforcement Action
The US Securities and Exchange Commission censured broker-dealer OTC Link LLC and imposed a $575,000 civil penalty for longstanding violations of Regulation Systems Compliance and Integrity (SCI). OTC Link LLC operates OTC Link ATS, an alternative trading system for over-the-counter securities.
Systemic Deficiencies and Examination Findings
Between August 2016 and March 2025, OTC Link LLC failed to establish, maintain, and enforce written policies and procedures mandated by Regulation SCI. The missing or draft procedures related directly to system security, access control, and application vulnerability management, testing, and remediation.
Staff from the SEC Division of Examinations audited OTC Link ATS multiple times during the period. On each occasion, examiners highlighted required policies and procedures that remained unfinalised or unenforced. The SEC determined that OTC Link LLC repeatedly failed to address and remediate these deficiencies in a timely manner.
Regulatory Rules and Settlement Terms
The regulatory order found that OTC Link LLC lacked written policies and procedures reasonably designed to ensure its operational capabilities and support fair and orderly markets, breaching Rule 1001(a)(1) of Regulation SCI. The firm also violated Rules 1001(a)(2) and 1001(a)(3) by failing to maintain minimum required policies, conduct periodic reviews, and remedy identified shortcomings.
Without admitting or denying the findings, OTC Link LLC agreed to a censure, a cease-and-desist order, and a $575,000 civil penalty.
